Overview
FAR 41.204 governs GSA areawide contracts, which are pre-established master agreements used by federal agencies to acquire utility services within a supplier's specific franchise territory. These contracts streamline the procurement process by providing standardized terms and conditions for regulated utility services such as electricity, gas, and water.
Key Rules
- Mandatory Use: Federal agencies are required to use existing GSA areawide contracts for utility requirements unless service is available from a competing supplier or the Head of the Contracting Activity (HCA) determines that using the contract is not advantageous to the government.
- Competition Requirements: If multiple utility suppliers are available in a geographic area, agencies must use competitive acquisition procedures rather than the areawide contract.
- Pricing and Tariffs: Rates are generally dictated by published tariffs approved by regulatory bodies; however, agencies have the authority to negotiate separate rates, terms, or conditions, which may require further regulatory approval.
- Ordering Process: To initiate service, a Contracting Officer must execute an "Authorization" form and attach it to a Standard Form (SF) 26. This package must include specific operational requirements, rate schedules, and delivery point details.
- Administrative Compliance: Agencies must provide GSA with a copy of the executed SF 26 and Authorization within 30 days of issuance. If an agency bypasses an areawide contract for being "not advantageous," they must document the file and send an information copy of that determination to GSA.
Practical Implications
- Streamlined Procurement: These contracts significantly reduce administrative lead time and costs by eliminating the need for agencies to negotiate baseline legal and administrative terms with local utility monopolies.
- Market Research Obligation: Before procuring utilities, Contracting Officers must consult the GSA list of areawide contracts and perform market research to determine if the service area allows for competition, as competition takes precedence over the use of an areawide contract.